AMERICAN RE CORPORATION REPORTS FIRST QUARTER NET INCOME OF $35.2 MILLION OR $.73 PER SHARE.PRINCETON Princeton, borough (1990 pop. 12,016) and surrounding township (1990 pop. 13,198), Mercer co., W central N.J.; settled late 1600s, borough inc. 1813, township est. 1838. A leading education center, it is the seat of Princeton Univ. , N.J.--(BUSINESS WIRE)--May 1, 1995--American Re Corporation (NYSE-ARN) reported first quarter net income to common stockholders of $35.2 million or $.73 per share, compared to $12.7 million or $.26 per share for the same quarter of 1994. Net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the first quarter (excluding net realized capital gains/losses) was $34.8 million or $.72 per share, compared to $12.2 million or $.25 per share for the same period last year. There were no material catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses in the first quarter. In the comparable period of 1994, net income and net operating income were each reduced by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $19.5 million, net of tax, or $.40 per share, due to catastrophe losses from the Northridge earthquake The Northridge earthquake occurred on January 17, 1994 at 4:31 AM Pacific Standard Time in the city of Los Angeles, California. The earthquake had a "strong" moment magnitude of 6. . After-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. net realized capital gains were $0.4 million or $.01 per share for the quarter ended March 31, 1995, compared to after-tax net realized capital gains of $0.5 million or $.01 per share for the same period in 1994. Per share amounts were computed using 48.6 million common shares and equivalents outstanding on a weighted-average basis during the first quarter of 1995 compared to 49.2 million for the same period last year. The Company's after-tax net investment income increased 7.5% to $39.2 million for the first quarter, compared to $36.5 million for the same quarter in 1994. Net cash flow provided by operating activities (after interest and taxes) was $103.8 million for 1995's first quarter, compared to $105.1 million provided during the same period in 1994. At March 31, 1995, the Company's consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: total assets were $6.9 billion, and consolidated stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. totaled $872.9 million or $18.55 per share, based on the 47.1 million common shares outstanding on that date. Pursuant to Financial Accounting Standard No. 115, consolidated stockholders' equity was reduced by $41.2 million or $.88 per share at March 31, 1995, as a result of marking to market Marking to market Settling or reconciling changes in the value of futures contracts on a daily basis. Also refers to the practice of reporting the value of assets on a market rather than book value basis. the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of applicable bond securities. Statutory net premiums written by the Company's subsidiaries increased 21.5% to $430.2 million versus $354.2 million in the first quarter of 1994. The subsidiaries statutory combined ratio was 98.9% for the first quarter of 1995, compared to 109.1% for the same period in 1994 (which included 9.7 points due to losses from the Northridge earthquake). The combined statutory surplus of the subsidiaries was $1.132 billion at March 31, 1995. Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. H. Inderbitzin, Chairman and Chief Executive Officer of American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Re-Insurance RE-INSURANCE, mar. contr. An insurance made by a former insurer, his executors, administrators, or assigns, to protect himself and his estate from a risk to which they were liable by the first insurance. 2. It differs from a double insurance (q.v. Company, said, "We continue to be pleased with the growth in our premium volume, the increase in our invested asset base, our improved portfolio yield, and finally, our overall profitability. During the first quarter, statutory net premiums written grew 17% domestically and 34% internationally compared to the same period in 1994, while our statutory combined ratio improved to 98.9%. Market conditions are still very difficult, particularly in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , but with our global reach and Whole Account approach we continue to attract a growing portfolio of profitable business opportunities from around the world." Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide B. Jobe, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of American Re Corporation, added, "During the first quarter, we voluntarily prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. $25 million of
principal on the Company's revolving credit Revolving CreditA line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, bringing the outstanding balance under the facility down to $175 million. The Company also paid its first quarterly dividend to common stockholders, a cash dividend of $.08 per share paid on March 31 to stockholders of record on March 17. These actions reflect our continuing intention to deleverage Deleverage The reduction of financial instruments or borrowed capital previously used to increase the potential return of an investment. It is the opposite of leverage. Notes: Increasing leverage increases a firm's risk, therefore, deleveraging attempts to lower risk. the Company, while increasing its value to stockholders." The Company, through its wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , is a direct writer of treaty and facultative facultative /fac·ul·ta·tive/ (fak´ul-ta?tiv) not obligatory; pertaining to the ability to adjust to particular circumstances or to assume a particular role. fac·ul·ta·tive adj. 1. reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. and related services, with approximately 1,200 employees in 13 domestic and 15 international offices. -0-
AMERICAN RE CORPORATION
MARCH 31, 1995 FINANCIAL HIGHLIGHTS
(Dollars in millions, except per share data)
Three-month period ended
March 31,
1995 1994 % Chg
SUMMARY PERFORMANCE DATA
(GAAP BASIS)
Gross premiums written $ 533.6 $ 464.9 14.8 % Net premiums written 434.8 385.3 12.8 Pre-tax net investment income 51.7 47.4 9.1 After-tax net investment income 39.2 36.5 7.5 INCOME STATEMENT DATA
Operating income, excluding
realized capital gains (1) 34.8 12.2 185.0
Net realized capital gains,
net of taxes 0.4 0.5 (22.3)
Net income to common stockholders $ 35.2 $ 12.7 177.2 %
(1) Includes effect of catastrophes $ --- $ 19.5 EARNINGS PER SHARE
Operating income, excluding
realized capital gains (2) $ 0.72 $ 0.25
Net realized capital gains,
net of taxes 0.01 0.01
Net income per common share $ 0.73 $ 0.26
(2) Includes effect of catastrophes $ --- $ 0.40
Weighted average shares and common
stock equivalents outstanding
(in millions) 48.6 49.2
CASH FLOW DATA Cash provided by operations $ 103.8 $ 105.1 -0-
AMERICAN RE CORPORATION
MARCH 31, 1995 FINANCIAL HIGHLIGHTS
(Dollars in millions, except per share data)
March 31, December 31,
BALANCE SHEET DATA 1995 1994
Cash and invested assets $ 3,465.2 $ 3,308.9 Total assets 6,947.0 6,677.9 Loss and loss adjustment expense reserves 4,108.2 3,971.9 Senior bank debt 175.0 200.0 Senior subordinated debt 450.0 450.0 Stockholders' equity 872.9 789.2 Book value per common share 18.55 16.77 Book value per common share excluding the effect of FAS 115 on the bond portfolio 19.43 18.82 STATUTORY DATA
Three-month period ended
March 31,
1995 1994
Combined Ratios
Loss ratio (1) 69.5 % 77.6 %
Commission ratio 21.8 23.2
Other underwriting expense ratio 7.6 8.3
Combined ratio 98.9 % 109.1 %
(1) Includes effect of catastrophes --- % 9.7 %
March 31, December 31,
1995 1994
Statutory surplus $ 1,131.9 $ 1,104.1 Premium/surplus ratio 1.42 to 1 1.39 to 1 Reserve/surplus ratio 2.12 to 1 2.13 to 1 -0-
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share data)
GAAP Basis Three-month period ended
March 31,
1995 1994
Gross premiums written $ 533.6 $ 464.9
Revenue:
Net premiums written 434.8 385.3
Change in unearned premiums (40.0) (61.5)
Premiums earned 394.8 323.8
Net investment income 51.7 47.4
Net realized capital gains (losses) 0.6 0.7
Other income 8.0 4.9
Total revenue 455.1 376.8
Losses and expenses:
Losses and loss adjustment expense 265.4 244.9
Commission expense 79.4 67.5
Operating expense 32.8 26.8
Interest expense 16.0 14.3
Other expense 14.4 7.8
Total losses and expenses 408.0 361.3
Income before income taxes 47.1 15.5
Federal and foreign income tax expense 11.9 2.8
Net income to common stockholders $ 35.2 $ 12.7
EARNINGS PER SHARE AND COMMON STOCK EQUIVALENTS
Primary earnings per share:
Operating income, excluding
realized capital gains $ 0.72 $ 0.25
Net realized capital gains, net of taxes 0.01 0.01
Net income per common share $ 0.73 $ 0.26
Weighted average shares and
common stock equivalents
outstanding (in millions) 48.6 49.2
-0-
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except per share data)
GAAP Basis
Assets March 31, December 31,
Investments 1995 1994
Bonds held to maturity, at
amortized cost (fair value:
March 31 1995 - $464.1;
December 31, 1994 - $457.5) $ 463.2 $ 470.8
Bonds available for sale, at
fair value (amortized cost:
March 31, 1995 - $2,796.2;
December 31, 1994 - $2,675.5) 2,730.8 2,525.0
Equity securities available
for sale, at fair value 11.0 10.8
Other invested assets 21.2 21.8
Cash and cash equivalents 239.0 280.5
Total investments and cash 3,465.2 3,308.9
Accrued investment income 48.9 58.6
Premiums due and other receivables 652.1 606.6
Deferred policy acquisition costs 219.9 213.5
Reinsurance recoverable on paid
and unpaid losses 1,772.9 1,721.1
Funds held by ceding companies 262.8 259.0
Prepaid reinsurance premiums 88.0 63.9
Deferred federal income taxes 54.5 86.1
Deferred financing fees 20.2 20.6
Goodwill 89.3 89.9
Other assets 273.2 249.7
Total assets $ 6,947.0 $ 6,677.9
Liabilities
Loss and loss adjustment
expense reserves $ 4,108.2 $ 3,971.9
Unearned premium reserve 797.5 731.5
Total insurance reserves 4,905.7 4,703.4
Loss balances payable 98.7 140.7
Funds held under reinsurance treaties 206.2 200.5
Senior bank debt 175.0 200.0
Senior subordinated debt 450.0 450.0
Other liabilities 238.5 194.1
Total liabilities 6,074.1 5,888.7
Stockholders' Equity
Common stock, par value $.01 per
share; authorized: 125,000,000 shares;
issued and outstanding:
December 31, 1994 and December 31, 1993
- 47,050,151 shares 0.5 0.5
Additional paid-in capital 710.9 710.9
Retained earnings 221.3 189.9
Net unrealized appreciation
(depreciation) of investments (39.3) (94.5)
Net unrealized loss on foreign exchange (20.5) (17.6)
Total stockholders' equity 872.9 789.2
Total liabilities and
stockholders' equity $ 6,947.0 $ 6,677.9
Additional information regarding results is contained in the
Results Supplement for First Quarter 1995, available on request from
Ms. Nancy Columbia, Investor Relations, at (609) 243-4684.
CONTACT: James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. R. Fisher fisher, name of a large North American marten, Martes pennanti. This carnivorous, largely arboreal mammal is found in hardwood forests of Canada, the extreme N United States, and mountain ranges of the W United States. (609) 243-4602 or Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs H. Walker, Jr. (609) 243-4679 |
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